Westfield to Pay $625 M. to Develop WTC Retail

The Port Authority has finalized a deal with the mall-operating giant Westfield Group to develop and operate the 488,000 square feet of retail planned for the World Trade Center site. The group, now in a joint venture with the Port Authority, will control retail both above ground and below; both in transit-related concourses and in Larry Silverstein’s three towers.

The total cost of developing the retail is estimated to cost $1.45 billion, with Westfield paying $625 million, according to the Port Authority.

The Port Authority and The Westfield Group – the world’s largest retail property owner by equity market capitalization – have agreed to jointly develop and operate 488,000 square feet of world-class quality retail at the World Trade Center site, the first new retail development to be built in lower Manhattan since 9/11.

The new World Trade Center retail, which will reconnect the site to neighborhoods in the downtown area, will bring a vibrant street-level environment for local residents, workers and tourists. The retail facilities will feature a full array of eateries, ranging from full-service restaurants to casual dining, and local, national and international specialty shops.

New York Governor Eliot Spitzer said, “This agreement will provide the business and residential communities in lower Manhattan with a major economic boost and create a further incentive to relocate downtown. This retail program will integrate the World Trade Center site with the rest of the city’s streetscape, creating a linkage that will allow for a bustling, active street life in the neighborhood.”

New York State Assembly Speaker Sheldon Silver said, “I have said all along that retail development at the World Trade Center must include street-level shopping to welcome residents, visitors and workers in an area, and reflects the fact that lower Manhattan is a vibrant 24-hour community. I am pleased that the plans announced today by the Port Authority of New York and New Jersey include this vital support for our neighborhood.”

Port Authority Chairman Anthony R. Coscia said, “This public-private partnership with Westfield will allow us to create a new, vibrant shopping and dining atmosphere at the World Trade Center site, while generating new revenue that can be reinvested in the region’s transportation system. This project will provide a major boost to the local economy, and will enhance the quality of life for those who live, work or visit downtown. It will provide them with a vibrant urban shopping experience, with about 50 percent of the retail above ground.”

Port Authority Executive Director Anthony E. Shorris said, “With its immediate connection to the community in lower Manhattan, the retail at the World Trade Center is one of the development’s most visible and important elements. Westfield brings the expertise and resources the project needs to make good on its promise. This is the third major public-private venture the Port Authority has brought on line this year – another showcase for the good we can do when we work together.”

Westfield Group Co-Managing Director Peter Lowy said, “It’s a thrill for Westfield to be back. We are excited to have the opportunity to reinvest in this great city and be involved with the redevelopment of this historic site. With the Port Authority, we look forward to putting our global experience and commitment to work creating a world-class, iconic shopping destination for all who live, work and visit here.”

New York City Council Member Alan J. Gerson said, “The World Trade Center calls for a unique, premiere retail presence, which serves the needs of the community while providing a worldwide attraction and accentuating the special nature of the site. Bustling retail activity will also demonstrate our determination to carry on our work and business, undeterred by our enemies. This partnership with The Westfield Group is a great first step toward realizing these goals.”

Manhattan Community Board 1 Chairperson Julie Menin said, “Retail is one of the key components that will help activate the street and realize the vision of a 24/7 community. We are thrilled that the Port Authority is bringing on Westfield as a partner to truly create the active street retail that lower Manhattan – the fastest-growing residential neighborhood in the city – deserves.”

The Port Authority will provide approximately $825 million and Westfield will provide approximately $625 million toward the $1.45 billion retail project.

Prior to September 11, 2001, Westfield had net leased the World Trade Center retail components, which consisted of 427,000 square feet of space, one of the highest-grossing shopping areas in the nation.

In December 2003, to accelerate the rebuilding at the World Trade Center site, the Port Authority acquired the retail net lease from Westfield.

The World Trade Center retail is just one of several projects on the site that are either in construction or progressing through the planning stages. There are currently more than 600 construction workers and 100 pieces of heavy equipment on the site, and nearly every corner of the 16 acres is now under construction.

Major construction on 1 World Trade Center, the Freedom Tower began during the middle of 2006, after a milestone master redevelopment agreement that outlined new roles and responsibilities for the rebuilding. The tower’s footings and foundations are nearly complete, and steel will begin to rise above street level during the first part of 2008.

Construction of the foundations for the World Trade Center Transportation Hub and Memorial also are underway. Major steel beams for both projects are scheduled to be erected during the upcoming year.